What happened to the P12B allocated to the modernization of the sugar industry?

It’s another case of what I’ve always thought to be one of our nation’s biggest problems: yes, we’re a nation of laws, but we seem to pass laws and then forget about them.

In the case of the Sugar Industry Development Act passed in 2015, we forgot that a whopping 2 billion pesos was allocated annually to the industry to improve its productivity.

What happened to the allocation of 12 billion pesos in six years, that there is not an iota of evidence to show that our sugar industry is improving its productivity?

All the terrible armchair pontifications on the sugar industry, that it is so unproductive that it should be allowed to die a natural death after the government lifts restrictions on imports – that this is a zombie industry, dead but not buried, said one columnist – miss one important thing: there is a state policy that this is an industry that will be made competitive with massive financial and organizational assistance from the government. This policy has not been changed.

This policy is enshrined in a law passed by the 16th Congress on July 28, 2014 and promulgated by President Benigno Aquino 3rd on March 27, 2015: “Law to promote and support the competitiveness of the sugar cane industry and other purposes. “

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What happened to the funds released for the Block Farming program? SOURCE: AUDIT COMMITTEE

I haven’t studied the sugar industry or the history of the law in enough detail so I can’t say if this law is one of Aquino 3rd’s few contributions to the country, or on the contrary, if it’s is another classic case of a weak republic captured by the oligarchs. In this case, it was Aquino’s main political base, the sugar owners of Iloilo and the Negros provinces that produce more than 60% of the country’s sugar, who intensely pushed for its enactment to pass. and promulgated in a record time of six months.

Sida

The law, called the Sugar Industry Development (SIDA) Act, is crystal clear in its Section 2, on the policy of this Republic, as determined by the people we have elected to make the laws (Congress):

“It is hereby declared to promote the competitiveness of the sugarcane industry and to maximize the utilization of sugarcane resources, and to improve the incomes of farmers and workers. agriculture, through improved productivity, product diversification, job creation and increased efficiency of sugar mills.”

To these ends, the State: a) establishes programs for the improvement of productivity; b) provide the necessary infrastructural support; (c) strengthen research and development of other products derived from sugar, sugar cane and their by-products; (d) provide human resource development and extension services; and (e) provide financial assistance to small farmers.”

Imagine any program to improve the sugar industry and this is already called for by SIDA, from the consolidation of small farms (to so-called block farms), socialized credit for the support and mechanization of farms, research and development, infrastructure and even scholarships for poor young people on the sugar farm.

P2 billion

The law allocated 2 billion pesos each year for the program starting in 2016, which means that the government until last year allocated 12 billion pesos to the sugar industry. Has it been attributed and used in accordance with the law? Barely.

A major component of SIDA was the “Sugarcane Block Farm” program which involved the consolidation of small farms of 10 hectares and less into agricultural blocks, with a minimum of 30 hectares each, with the aim of increasing sugar cane productivity. to 75 tonnes of cane per hectare. by introducing a good cultivation of sugar cane. It has hardly been done. The 2021 report of the Audit Commission on the Sugar Regulatory Administration (SRA), however, found that:

“SRA’s block farming program shows underspending of its fund in its fifth year of implementation, as only P768.835 million or 65.5% of the total budget amounting to P1.174 billion pula, have been committed as of December 31, 2020.” Of the 1.2 billion pesos allocated to the block farming program, only 769 million pesos had been used. As a result, the SRA had set up only 213 block farms, comprising 8,500 hectares – an insignificant 6 percent of the area of ​​the 140,000 small sugar farms. Statistically, this means that the block farming program was not implemented.

A research study on the sugar industry published in October 2020 by the National Economic Development Authority (NEDA) also concluded: “Another major Sida program, the social credit program, was supposed to have a total allocation of 1.2 billion pesos from 2016-2019, but only 624 million pesos were approved to be released, of which only 111.5 million pesos were actually released for borrowers. The utilization rate was therefore only 17.8% of the approved funds and 9.3% of the allocation prescribed by SIDA. “

CoA

The CoA report even pointed out that for 2018 funds for SIDA programs for supply of tractors and supply of livelihood projects for Luzon and Mindanao were released but not used at all. For the Visayas, in 2019, over 90% of Sida funds for agricultural mechanization support and livelihood development were released but not utilized by the SRA.

SRA officials told the CoA that the Covid-10 pandemic was to blame as it had hampered its work implementing AIDS. The NEDA report, however, indicates that the SRA is organizationally unable to implement the sugar industry reforms.

“The SRA is organizationally challenged to take on development roles that support its regulatory functions and overall AIDS implementation.

SRA’s current workforce is considered highly skilled and dedicated, but ill-equipped for the broader challenges posed by AIDS and the current development landscape. The agency’s structure is heavy with regulations and much of the staff’s time and resources are devoted to enforcing them. Its development function relies heavily on R&D, which focuses on the development, propagation and distribution of high yielding sugar spike varieties.

Unchanged

Its structure, skills and staff remain unchanged even after its designation as SIDA’s main implementer, which requires a different set of skills, as well as greater staff and budget support. Although the agency has formulated a restructuring plan, it has not yet been fully implemented.”

Although it has been the main implementer of SIDA since 2016, the SRA does not even have an annual report on how it has implemented what is really the landmark reform agenda, required by law. All he has on his website is poorly organized data on the implementation of SIDA.

I suspect that from its leadership down to its lower rank officials, the SRA has been focused on producing data to justify the continued importation of sugar. Be suspicious and the “why” would become clear enough.

How can we say that we must abandon the sugar industry, when a program to strengthen it has hardly been put in place?

Neoliberal believers seem to ignore the fact that 54 rich countries and 12 emerging economies provide more than $700 billion each year in some form of support to their agricultural sector. And we say we simply leave the fate of our sugar and other agricultural sectors to market forces?

The Secretary of Agriculture certainly has his work cut out for him.


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Rachel J. Bradford